Congestion Tax to Be Introduced Permanently in August 2007

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ARMONK, NY
& STOCKHOLM, SWEDEN
-
20 Jun 2007:
The Swedish National Parliament today voted to permanently adopt the road charging system trialed by IBM (NYSE: IBM) and the Swedish Road Administration in Stockholm last year. This follows a seven-month pilot project in 2006 that saw peak-time road traffic congestion dramatically reduced, air pollutants cut by up to 12 percent and public transport usage increased by around 40,000 commuters a day. IBM will proceed with the city-wide road charging solution roll-out in August 2007.

The IBM contract award includes implementing and running the congestion charging system in the City of Stockholm, based on the system used during the 2006 pilot. The decision follows the positive outcome of a public referendum that took place in September last year, which saw a majority of Stockholm citizens vote in favor of retaining the pioneering system.

According to Birger Höök, Director of the Swedish Road Administration's traffic registry: "The Stockholm pilot was a success thanks to several factors including: effective public information; the IT system which functioned perfectly from day one; and the positive results of the pilot which were very obvious to Stockholm residents."

"Through the pilot, IBM helped establish that a technically elegant and flexible road charging system can be attractive to city dwellers and commuters alike. Its success, based on an innovative business model, is a landmark development for road charging. The environmental and traffic congestion effects of the Stockholm scheme, along with the successful implementation, is certain to have a major influence on many other cities considering road charging schemes," says Jamie Houghton, Global Road User Charging Leader, IBM.

The Stockholm system is the largest of its kind in Europe, with 18 barrier-free control points around the charging zone equipped with cameras and a beacon system to identify vehicles and provide evidence to support the enforcement of non-payers. Payment channels include automatic direct debit, a Giro system at banks, over the Internet, and at retail stores such as 7-11.

The original project involved collaboration between IBM consulting, research and technology specialists. In addition to the Swedish Road Administration and IBM, other organizations involved in the scheme's development and operation include Q Free (a roadside equipment and tag provider), Manpower (call centre staffing), Sweden Post (provision of printing services and distribution of tags), Reitan (in-store payment) and Nordea (payment services). A critical success factor was the high skill level of the Swedish Road Administration team.

IBM is investing in innovative solutions for the growing international road charging market, blending skills and innovation in road charging business operations, on-board and roadside equipment, wireless communications, multiple payment channels and other value added services.